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Entries tagged "tax policy"
On June 12, 2013, the Institute for Policy Studies released the sixth in a series of reports on the Fix the Debt corporate lobby group. This newest report, Corporate Pirates of the Caribbean, uses Fix the Debt members’ SEC filings to calculate how much they would stand to gain from a shift to a territorial tax system. Such a reform would permanently exempt U.S. corporations’ foreign earnings from U.S. income taxes.
In response to this IPS report, Fix the Debt issued a press release denying that they have ever taken a position on this controversial tax reform and spokeswoman Maya MacGuineas described the report as “lies and mudslinging.”
These attacks on our research conflict with clear statements in support of a territorial tax system, both by Fix the Debt directly and by numerous Fix the Debt leaders.
As we pointed out in our first report, published in November 2012, Fix the Debt expressed unambiguous support for a territorial tax system in a PowerPoint on their web site (see slide 11). The PowerPoint was described as a “CEO Tool” to help business leaders recruit others to join Fix the Debt. This IPS report, The CEO Campaign to “Fix” the Debt: A Trojan Horse for Massive Corporate Tax Breaks, received significant coverage in the mainstream and alternative press.
More than six months later, with this same PowerPoint still on their web site, Fix the Debt is claiming they have never had a position on a territorial tax system. And even though we reprinted the slide in our new report, Fix the Debt spokespeople did not address this obvious inconsistency.
Support for territorial tax reform is a core plank of the fiscal reform plan articulated by Fix the Debt Co-Chairs Erskine Bowles and Alan Simpson. In April 2013, Fix the Debt prominently featured Bowles-Simpson 2.0 on their website. In their piece applauding the new Simpson-Bowles plan, Fix the Debt includes “move toward a territorial system” as one of five key components of the plan.
Our plan puts in place a process for comprehensive tax reform to eliminate or scale back tax expenditures in order to generate nearly $600 billion in revenues for deficit reduction substantially reducing marginal tax rates for individuals, corporations and small business, and moving toward a competitive territorial system while maintaining the progressivity of the tax code.
Excerpted from A Bi-Partisan Path Forward to Securing America’s Future, (aka Bowles-Simpson 2.0) Moment of Truth Project; April 2013, p 7.
Other prominent Fix the Debt leaders have also been vocal in their support of a territorial tax system for corporations:
“We shouldn’t be imperiling U.S. companies to be competitive with our foreign competitors by putting in a tax policy that puts them at a disadvantage. So, I’m very much in favor of a territorial system and that’s what we advocated in Simpson-Bowles."
- David Cote, CEO of Honeywell, CEO Fix the Debt Steering Committee member and Member of the Simpson-Bowles Deficit Reduction Commission, Bloomberg Street Sense, August 27, 2012
The U.S. needs to "allow this territorial system [excusing repatriated profits from being subject to domestic taxes] so that companies can repatriate their earning back to the United States."
- Jeffrey Immelt, CEO of General Electric, Fix the Debt CEO Steering Committee member, exclusive interview with CNN, October 4, 2012
“We need comprehensive business tax reform that will lower tax rates and provide certainty for all businesses. We also need to move to a competitive territorial tax system in line with other major industrialized nations.”
- Doug Oberhelman, CEO of Caterpillar, Fix the Debt CEO Steering Committee (with Mary Andringa), op-ed in Roll Call, June 6, 2012
“Tax policy: I think the President's put out some really good suggestions, but we've got to get to the territorial tax.”
- Andrew Liveris, Chairman Dow Chemical, Fix the Debt CEO Steering Committee member, Kudlow Report, CNBC, April 19, 2012
“One of the things that's always bothered me is that we don't have a territorial tax system.”
- Paul Jacobs, CEO of Qualcomm, Fix the Debt CEO Steering Committee member, USA Today, May 20, 2013
The Fix the Debt campaign appears to be facing a dilemma.
On the one hand, they seem to be trying to recruit and maintain CEO supporters by creating a platform for promoting policies that would primarily benefit large corporations. On the other hand, they are trying to build broad public support through slick PR gimmicks emphasizing a message of shared sacrifice.
Rather than attacking IPS research, they may want to focus on resolving these inconsistencies.
In poll after poll, the American people say they are far more concerned about the jobs crisis than the “debt crisis.” A powerful coalition of CEOs says they have an answer for both problems.
Give us more tax breaks, they say, and we’ll use the money to invest and create jobs. The national economic pie will expand and Uncle Sam will get plenty of the frothy meringue without having to raise tax rates.
That’s the line of the Fix the Debt campaign. Led by more than 90 CEOs, this turbo-charged PR/lobbying machine is blasting the message that such “pro-growth tax reform” should be a pillar of any deficit deal (along with cuts to benefit programs like Social Security and Medicare).
And it might be a good line — if not for some pesky real-world facts. You see the same corporations peddling this line have already been paying next to nothing in taxes. And instead of creating jobs, they’ve been destroying them. Here are five examples of job-cutting, tax-dodging CEOs who are leading Fix the Debt.
1. Randall Stephenson, AT&T
U.S. jobs destroyed since 2007: 54,000
Average effective federal corporate income tax rate, 2009-2011: 6.3%
Randall Stephenson presides over the biggest job destroyer among the Fix the Debt corporate supporters, having eliminated 54,000 jobs since 2007. The company also has one of the largest deficits in its worker pension fund — a gaping hole of $10 billion.
Can Stephenson blame all this belt-tightening on the Tax Man? Not exactly. Over the last three years, AT&T’s tax bills have been miniscule. According to the firm’s own financial reports, they’ve paid Uncle Sam only 6.3 percent on more than $43 billion in profits. If the telecom giant had paid the standard 35 percent corporate tax rate over the last three years, the federal deficit would be $12.5 billion lower.
So where have AT&T’s profits gone? A huge chunk has landed in Stephenson’s own pension fund. His $47 million AT&T retirement account is the third-largest among Fix the Debt CEOs. If converted to an annuity when he hits age 65, it would net him a retirement check of more than a quarter million dollars every month for the rest of his life.
While his economic future is more than secure, Stephenson emerged from a meeting with President Obama on November 28 “optimistic” about the chances of reforming (i.e., cutting) Social Security as part of a deal to avoid the so-called “fiscal cliff.”
2. Lowell McAdam, Verizon
U.S. jobs destroyed since 2007: 30,000
Average effective federal corporate income tax rate, 2009-2011: -3.3%
Another telecommunications giant, Verizon, is close behind AT&T in the layoff leader race, with 30,000 job cuts since 2007. Like its industry peer AT&T, Verizon also has a big deficit in its pension accounts. It would need to cough up $6 billion to meet its promised pension benefits to employees and another $24 billion to meet promised post-retirement health care benefits.
Did the blood-sucking IRS leave Verizon no choice but to slash jobs and underfund worker pensions? Far from it. The company actually got money back from Uncle Sam, despite reporting $34 billion in U.S. profits over the last three years. If Verizon had paid the full corporate tax rate of 35 percent, last year’s national deficit would have been $13.1 billion less. Had that amount been used for public education, it could have covered the cost of employing more than 190,000 elementary teachers for a year.
Verizon’s new CEO, Lowell McAdam, already has $8.7 million in Verizon pension assets, enough to set him up for a $47,834 monthly retirement check. McAdam’s predecessor, Ivan Seidenberg, who has also signed up as a Fix the Debt supporter, retired with more than $70 million in his Verizon retirement package.
Wanna see who is rounding up the worst five? Read the rest at Alternet.
October 31, 2011 · By Sam Pizzigati
Texas governor Rick Perry has unveiled, with suitable hoopla, his Presidential campaign’s tax plan. His new plan, released last week, differs on the details with the tax plans his rivals for the GOP nod had earlier offered up. But all the plans end up in the same place. They all generate huge tax savings for America’s rich.
A reporter asked candidate Perry if these windfalls for the wealthy — “millions of dollars” in savings for some taxpayers — bothered him at all. Perry shrugged. His response: “I don’t care about that.”
Those of us who do care about “that,” about policies that widen our already staggering economic gaps, now have two new resources. In this week’s Too Much, we review the first, a sprightly UK think tank online pamphlet that offers “ten reasons to care about economic inequality.”
The second, an engaging 17-minute video from the famed epidemiologist Richard Wilkinson, charts how inequality is eating away at how well — and how long — we all live. Rick Perry will likely never watch his video. The rest of us should.
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September 19, 2011 · By Sam Pizzigati
President Obama last week proposed a tax increase on America’s wealthy to finance the $447 billion jobs plan he advanced the week before. Representative Eric Cantor, the GOP House majority leader, responded almost immediately.
“I sure hope that the president is not suggesting,” Representative Cantor pronounced, “that we pay for his proposals with a massive tax increase at the end of 2012 on job creators.”
Interesting. Does this mean that Cantor now welcomes tax hikes for job “destroyers”? Like Richard Clark, the chair of drugmaker Merck. Clark took home $17.9 million last year. His company earlier this year announced plans to shed 13,000 workers. Or how about Bank of America CEO Brian Moynihan? He pulled in $10 million last year. B of A has just announced 30,000 new job cuts.
We suspect that majority leader Cantor misspoke. He really doesn’t support tax increases on rich people period, whatever their job record may be. Cantor’s perspective has, of course, dominated Congress for the last three decades.
Read more at Too Much Online.